BCE Submits New Astral Deal Proposal To CRTC

by Gaurav Kheterpal on November 20, 2012

It all dates back to March this year when Bell set its beady sights on Astral Media, a Montreal-based company that will give Bell access to a load of French language radio programming in Quebec and, yes, more television channels, including the Movie Channel, HBO Canada and Family. Back then, it was expected that the deal would hit a regulatory hurdle and there were no real surprises as the CRTC obliged with an investigation in September.

As things turned out, the CRTC subsequently rejected its proposed $3.4-billion takeover of Astral Media, saying it would place too much power in the hands of one company and threaten the competitive media landscape in Canada. Since then, Bell has been trying out every trick in the bag to get a second chance on the deal. The company asked the federal cabinet to intervene but the ploy didn’t pay off.

So, BCE went back to the drawing board, redid its Astral proposal and yesterday submitted it to the CRTC claiming that it addresses the federal regulator’s concern about the telecom giant dominating the television market.

In a joint announcement yesterday, BCE and Astral announced that the revised deal is worth $3.38 billion, subject to approval by the CRTC and the Competition Bureau — about the value as the original deal. No further details were provided but the companies claim it addresses the commission’s concerns and sets out the steps the companies would take to comply with the relevant viewership thresholds.

Astral has 25 specialty TV services, including the Movie Network, Family Channel and Disney XD, and 84 radio stations. BCE, on the other hand, has fast acquired the image of a roaring media-devouring beast, munching up everything and anything in the Canadian entertainment landscape it can get its claws on. The CRTC killed the deal last month — saying Bell would end up with too much market share in some areas, despite the companies’ view that they had stayed within regulatory thresholds.

“We heard Canadians and the CRTC loud and clear — they want assurance that Astral joining with Bell Media will directly benefit consumers and creators,” BCE chief executive and president George Cope said in the statement.  “We’re ready to deliver more choice for listeners and viewers, more opportunity for content creators, and more competition for the broadcasting industry.”

It’ll be interesting to see if the CRTC approves the deal based on the new proposal. It’s a worrying sign according to some as the Bell/Astral deal means that the telecommunications and broadcasting lines become even more blurred than they already are. It helps give Bell a foothold in Quebec. And it continues to solidify Canada’s telecommunications climate as an oligopoly withBloblike tendencies.

Astral is (or was) the fifth largest television operator in the country and is (or was) the second largest radio station operator in the country. Bell already lumbers over Astral like a blubbering giant, owning more media properties than it knows what to do with. In this case, it’s a case of “me hungry, me eat” as Cope devours another smaller contender.

The deal would give BCE Inc. 40 percent of the pay and specialty TV market, 34.3 percent of the entire Canadian television spectrum and a quarter of all radio station revenues. That puts the media “Big Four” of Bell, Shaw Communications, Rogers, and QMI in charge of 90 percent of the pay and specialty TV market and 85 percent of the television market combined. The landscape of Canadian media outlets, already about as diverse as a Republican National Convention, looks dismal indeed.

BCE and Astral say aim to close the deal by June 1, although they have postponement rights to change the closing date to July 31.

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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